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California Mortgage Rates for both Refinance and Home Purchase are now at a 2 month high – at their worst levels since early June. Freddie Mac today in its Primary Mortgage Market Survey announced that in the week ending Aug 16th, the 30 Year Fixed Rates climbed to 3.62%, 15 Year Fixed Mortgage to 2.88% and 5 Year Adjustable Rate Mortgage (ARM) to 2.76%. All these rates are with 0.6% points and standard closing cost. So on a $400k loan in California, that could be a total closing cost of approximately $5000. Also, note that these rates are for conforming loans under $417,000. For conforming Jumbo loans up to $625,500 the rates are typically .125% to .25% higher.
What’s causing California Mortgage Rates to Jump – There are basically 2 reasons:
- There is less fear over Europe debt crisis.
- Better economic reports in the US recently has analysts expecting that FED wont do another easing in Q3, something that market was expecting till 2 weeks back. Even Goldman Sachs said yesterday that Fed wont do another easing in September and their words carry weight.
The result is moving out of safe instruments like US Treasury and Mortgage Backed Securities (MBS). Just in last 2 days Fannie Mae 3% coupon is down more than 100 bps. The more the Mortgage Backed Securities go down – the higher the mortgage rates. (Watch a video on How Mortgage Rates move)
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Outlook for California Mortgage Rates – If you are closing in next 2-4 weeks on a Refinance or if you are in a purchase contract, lock on the next “up” day, meaning the day when the market improves a little. You may have slightly more wiggle room if you are closing in 30-60 days, but that too is fairly uncertain at the moment. Remember even at this level, rates and cost continue to operate at all time best levels.
If you are shopping for Mortgage Rates in California, Washington or Oregon, please call us at (408) 615-0655 or get a live rate quote here. We also offer, no points and no cost option on most refinances.